PROTECTING TRADE SECRETS IN THE TIMES OF THE PANDEMIC

Since trade secrets are not registered with the government, like patents or trademarks, companies must take proactive measures to preserve them. Those who fail to take reasonable measures, risk finding out down the road (usually in court, when the try to recover stolen trade secrets from a rogue employee) that their information has lost its trade secrets status.

When Do Employers Enforce Non-Compete Agreements?

Many companies in Texas have non-competition agreements with their employees, but not all companies enforce them.  Some companies will sue the departing employees for violating non-compete agreements, even thought such agreement may not be valid under Texas laws.  Others, will not bother with enforcement even though they have valid agreements on hand.  The reality is that the validity of a non-compete agreement is only one factor in a company’s decision whether to enforce it.

COVID-19 Texas Employer Guide – Are Non-Compete Agreements Still Enforceable?

In Texas, the reason for termination of employment – whether it was for cause, without cause, a layoff, a reduction in force, or any other reason – does not affect the enforceability of a non-compete agreement. Therefore, employers should not assume that non-competition agreements are no longer enforceable and must carefully approach enforcement of such agreements against departing employees as well as the hiring of new employees who may be still bound by non-competition agreements with their former employers. 

COVID 19 – How Does It Affect Contractual Obligations?

Sometimes, a business can be excused from performing under a contract due to a force majeure or an “Act of God” provision in that agreement. However, given that COVID 19 is a new phenomenon, there is no clear law on (1) whether COVID 19 qualifies as an “Act of God” or a force majeure event and (2) many contracts will need to be interpreted to determine whether their particular force majeure clauses encompass COVID 19.  Needless to say, the parties may disagreed about the interpretation. 

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